Fixed penalty notices avoid councils having to prosecute offenders at court.
Local Government Association environment spokesman, Martin Tett, said it was wrong that councils had to spend 'vast amounts' a year tackling the problem at a time when they continued to face significant funding pressures.
The move by the Government to allow councils to apply fixed penalty notices for small scale fly-tipping - in response to requests from town halls - had been a 'big step in the right direction' to help crackdown on fly-tippers, he said.
But he said councils may still feel prosecutions are the most effective course of action.
"When they take offenders to court, councils need a faster and more effective legal system which means fly-tippers are given hard-hitting fines for more serious offences," he said.
"Local authorities should also be able to recoup all prosecution costs, rather than be left out of pocket."
An Environment Department spokeswoman said: "Fly-tipping is an unacceptable blight on our landscape, which is why we have cracked down on offenders by strengthening sentencing guidelines and giving councils the powers to hand out on-the-spot fines to fly-tippers.
"We have made it easier for vehicles suspected of being used for fly-tipping to be stopped, searched and seized and will continue to work with local partners to stop this inexcusable crime."